Monday, 28 October 2013

The four schedules filed by the Receiver address total distributions
of approximately $12.59 million of the $55 million that has been
authorized for distribution by the Court. For Stanford Investors who
have not yet received an initial distribution, there are a number of
reasons why that may have occurred, including the following:

•Investor may not have filed a claim with the Receiver’s claim process before the Bar Date fixed by the Court.
•The Investor may not have responded to a request for additional
information from the Receiver’s claim processing agent, Gilardi &
Co. •The Investor may have objected to the Receiver’s Notice of Determination with respect to the Investor’s claim. •The Investor may not have completed and returned the Receiver’s Certification Form.*
•The Investor’s distribution check may simply be in process, such that
it will be listed on subsequent schedules to be filed by the Receiver.

The
Receiver is continuing to process Notices of Determination, objections
to Notices of Determination, and Claim Certifications. Additional
payment schedules will be prepared and filed on a rolling basis. It is
the Receiver’s expectation that additional payment schedules will be
prepared and filed every few weeks (provided that there are sufficient
claims being processed to justify that pace).

*The Receiver
advises that a significant number of Investors who filed claims and
received Notices of Determination have not yet returned completed
Certification Forms. Completed Certification Forms must be received
before distribution checks are issued.

Saturday, 26 October 2013

Receiver files 5th Schedule of Payments to be Made Pursuant to the Interim Distribution Plan
- On October 25, 2013, the Receiver filed his 5th Schedule of
distribution payments with the United States District Court for the
Northern District of Texas, Dallas Division. The 5th Schedule will be
followed by others, each of which will be submitted by the Receiver on a
rolling basis as additional responses to Certification Notices are
received and processed.

Thursday, 24 October 2013

STANFORD UPDATE OCTOBER 23rd 2013
TO ALL SEC CLIENTS
TO ALL SFA CLIENTS

Dear Stanford Clients:

We write to update you with important information regarding the claim against the SEC and

ZELAYA V. UNITED STATES OF AMERICA

As you may be aware, United States District Court Judge Robert N. Scola recently issued an order granting the Government’s second motion to dismiss the Plaintiffs’ complaint. This ruling comes despite the historic victory previously achieved in surviving the Government’s first motion to dismiss. The result of the order is that the lower court has made a final determination on the entire case and as such KLS is now in a position to appeal the entire case to the United States Court of Appeals for authoritative resolution of all issues.

To that end, KLS has filed a notice of appeal earlier this month, and will submit its full appeal brief in November. KLS will of course keep all clients up to date with developments in the case as they arise, including the approximate timeline of the appeal.

STANFORD FURTHER ACTIONS

In accordance with our previous updates, we would like to make sure that all clients are aware of progress with the Dallas receiver. By now, clients should have received:

1) A notice of Determination
2) A Certification Notice.

If You Have Already Received A Certification Notice

For those of you who have already received a notice directly, it is important to let us know as soon as possible so that we can assist you in processing your claim. Please forward any and all paperwork you have received from the Receiver. Please also sign the attached confirmation in order for us to be able to deal with the Receiver on your behalf directly.

If You Have Not Yet Received A Certification Notice

If you have not yet received a notice, we can check on the current status of your case on your behalf. To enable us to do this, please sign the attached confirmation. Please also be vigilant for any notifications sent to you directly by email as there are strict deadlines to respond.

If You Are Not Yet a Stanford Further Actions (SFA)

Client
If you have not yet signed a retainer agreement with KLS, time is running out to submit and process these claims. If you would like us to deal with these claims to the receiver on your
behalf, please sign the enclosed authorization form and or contact us with any queries you may have. We can then forward you our standard retainer letter.

SALE OF STANFORD INVESTORS’ CLAIMS

KLS is being solicited by a number of funds that appear to have increased their initial offers to acquire claims from Stanford investors to between 10 and 20 cents on the dollar (i.e. 10-20% of their claimed value). If any of our clients have an interest in pursuing such an offer, please advise us directly so we can facilitate discussions with these funds.

Saturday, 19 October 2013

On October 17th, 2013, the Receiver filed his 4th Schedule of distribution payments with the United States District Court for the Northern District of Texas, Dallas Division. The 4th Schedule will be followed by others, each of which will be submitted by the Receiver on a rolling basis as additional responses to Certification Notices are received and processed.

Thursday, 17 October 2013

(Reuters) - U.S. regulators sought to overturn a 2012 court ruling that prohibited victims of Allen Stanford's $7 billion Ponzi scheme from seeking compensation, in an unprecedented legal battle between the government and an industry-backed fund that protects investors.

In oral arguments on Wednesday, a lawyer for the U.S. Securities and Exchange Commission urged the U.S. Court of Appeals for the District of Columbia to force the fund to start court proceedings so that victims can file claims to recover at least a portion of the millions of dollars they lost.

The Securities Investor Protection Corp (SIPC), which administers the fund, has refused to do so, saying it believes Stanford investors do not meet the legal definition of "customer" under a federal law that is designed to protect investors if their U.S. brokerage collapses.

SIPC uses funds paid for by the brokerage industry to compensate investors if that happens.

A federal district judge agreed with SIPC's position in July 2012, and tossed out the SEC's lawsuit.

But pressure from a well-organized group of investors who lost money in the scheme and some members of Congress has helped keep the fight alive.

Two of the judges on the panel put lawyers representing the SEC and SIPC through a series of rigorous and difficult questions, often playing devil's advocate with each side. A third judge on the panel was not present for the arguments.

The judges gave no strong hints on how they may rule.

However, Chief Judge Merrick Garland asked a series of questions about whether the SEC could simply write new rules that would compel SIPC to act, as opposed to seeking a resolution in court.

The SEC, as SIPC's regulatory supervisor, has argued that it has the legal authority and discretion to force the fund to take action.

"Is there anything stopping the SEC from issuing a rule defining 'customer' the way that you want to define it here?" Garland asked.

"I don't believe so," replied John Avery, the attorney arguing the SEC's case. But if it were challenged, he added, the SEC would land right back in court again.

Allen Stanford was sentenced in 2012 to 110 years in prison for bilking investors with fraudulent certificates of deposit issued by Stanford International Bank, his bank in Antigua.

Many of the investors who purchased these products, however, did so through his Houston, Texas-based brokerage, Stanford Group Co.

At the heart of the case is the question of whether the victims of Allen Stanford's Ponzi scheme meet the legal definition of "customer."

SIPC argues that the investors in the scheme entrusted their money to the offshore, unregulated Antiguan bank and not to the U.S. broker-dealer.

Moreover, they say that Stanford's investors actually did receive their certificates of deposit as promised, even though they turned out to be virtually worthless.

The law, they said, is not designed to combat fraud or guarantee an investment's value.

The SEC, however, says the location of the Stanford bank is irrelevant because the entire business organization was operating one massive fraud, and that in fact no actual certificates of deposit truly existed.

"It's very difficult to draw a meaningful distinction between any of these Stanford entities, which were all part of the scheme, they were all in on the scheme, they didn't follow corporate formalities and the money was commingled," SEC attorney John Avery argued. "We believe the money, at least constructively, stayed with SGC."

SIPC's attorney Michael McConnell urged the court not to allow the SEC to simply lump the Stanford business entities together so the investors can file claims.

He added that the investors received disclosures explicitly telling them the Antiguan bank was not SIPC-protected or U.S.-regulated.

"You have people who in the face of disclosure statements clearly to the contrary, go off to an offshore bank seeking ... outlandishly high rates of return knowing that it is not covered by the securities laws," he said.

"Effectively, what the SEC is telling us is that SIPC should implicitly give free insurance coverage to a fly-by-night organization."

President Barack Obama received $4,600 in campaign contributions from R. Allen Stanford less than a year before the Texan was arrested in 2009 for running one of the biggest Ponzi schemes in U.S. history.

Despite repeated requests, the Obama campaign has not returned the money to the court-appointed receiver tasked with recovering money from the fraud and returning it to Stanford’s victims. The campaign still has $5.4 million in its coffers even though the president won't be running in another election.

Obama isn’t the only politician who has declined to return Stanford campaign contributions to help make Stanford’s defrauded investors whole. A total of 39 candidates and committees have kept their campaign funds despite the pleas by the receiver, Texas Lawyer Ralph Janvey, to return the money.

A spokesman for the Democratic National Committee, which now speaks for the Obama campaign, did not immediately comment.
Rep. Pete Sessions, R-Texas, has the largest outstanding contribution that hasn’t been returned — $10,000 — according to the web site of the receiver. The New Jersey Democratic State Committee also received $10,000 from Stanford and his companies, the web site says.

Other members of Congress on the receiver’s list include Sen. John Cornyn, R-Texas, and Rep. Richard Neal, D-Mass.

Stanford was sentenced in 2012 to 110 years in prison for bilking investors out of $7.2 billion. The Texan ran an investment firm that sold fraudulent certificates of deposit in an Antigua-based bank that he owned called Stanford International Bank Ltd.

Five Democratic and Republican national campaign committees, which had received more than $1.6 million from Stanford and his companies, fought attempts by Janvey to recover those contributions. In October 2012, a federal appeals court ordered the committees to turn over the money and pay the receivership’s attorney fees.

Janvey has not sued Obama’s campaign, or the other 38 committees who haven’t returned their contributions, because the cost of a suit would be more than the amount recovered, said Kevin Sadler, a lawyer with Baker Botts that represents the receivership.

Many members of Congress and presidential candidates returned the ill-gotten contributions voluntarily. Former Sen. Christopher Dodd (D-Conn.) returned a total of $27,500 and Sen. Richard Shelby, R-Ala., reimbursed the receivership $14,000.

Janvey was appointed in February 2009 to wind down Stanford’s web of companies and try to recover as much money as possible to return to the investors who were defrauded in the scheme.

To date, he has recovered $234.4 million. However, the costs of winding down the companies, and of lawsuits trying to recover money, have eaten up more than half that amount.

Stanford investors last month began receiving their first checks since the receivership was created in amounts that totaled about a penny for each dollar lost.

Tuesday, 15 October 2013

Ontario Attorney General Recovers $17 Million for Victims of Ponzi Scheme. Largest Ever Recovery Under Ontario’s Civil Forfeiture Law.

TORONTO -- Ontario's Attorney General has obtained a court order to recover $17 million for victims of an international investment fraud -- the largest ever recovery under Ontario's civil forfeiture law.

"In 2009, U.S. authorities referred this case to our Civil Remedies for Illicit Activities Office. I am proud that victims of this large-scale, international fraud are going to be compensated thanks to excellent cooperation between Ontario and the United States,” said Ontario Attorney General John Gerretsen.

The money was linked to an international Ponzi scheme operated over the past decade by the Stanford group of companies in the United States, South America and the Caribbean. Under the scheme, returns to investors were paid from their own money or the money of other investors, rather than from profit. U.S. authorities filed suit against Stanford and his companies in 2009.

Although the money was held in accounts at a major Canadian bank, the majority of victims are in the U.S. and Latin America. As a result of the court order, the $17 million will be forfeited to Ontario and then transferred to the United States Department of Justice, which will distribute the funds to victims.

Another $6 million remains under control of the court and is designated to be returned to victims who deposited money in accounts after the fraud was uncovered.

The Stanford Ponzi scheme resulted in $5.9 billion of investor losses worldwide, with an estimated 28,000 victims. The number of Canadian victims is not yet known.

The Stanford group of companies include the Stanford International Bank, Ltd., Stanford Group Company and Stanford Capital Management LLC.

The Civil Remedies Act, 2001 allows the Attorney General to ask the civil court for an order to freeze, take possession of, and forfeit to the Crown, property that is determined to be a proceed or an instrument of unlawful activity.

Ontario has approximately $24.5 million in frozen property, pending completion of civil forfeiture proceedings.

Attorney General Recovers $17 Million for Victims of Ponzi Scheme
Largest Ever Recovery Under Ontario’s Civil Forfeiture Law

September 24, 2013 6:00 a.m.
Ministry of the Attorney General

Ontario's Attorney General has obtained a court order to recover $17 million for victims of an international investment fraud -- the largest ever recovery under Ontario's civil forfeiture law.

The money was linked to an international Ponzi scheme operated over the past decade by the Stanford group of companies in the United States, South America and the Caribbean. Under the scheme, returns to investors were paid from their own money or the money of other investors, rather than from profit. U.S. authorities filed suit against Stanford and his companies in 2009.

Although the money was held in accounts at a major Canadian bank, the majority of victims are in the U.S. and Latin America. As a result of the court order, the $17 million will be forfeited to Ontario and then transferred to the United States Department of Justice, which will distribute the funds to victims.

Quick Facts
•Another $6 million remains under control of the court and is designated to be returned to victims who deposited money in accounts after the fraud was uncovered.
•The Ponzi scheme resulted in $5.9 billion of investor losses worldwide.
•There are an estimated 28,000 victims. The number of Canadian victims is not yet known.
•The Stanford group of companies include the Stanford International Bank, Ltd., Stanford Group Company and Stanford Capital Management LLC.
•The Civil Remedies Act, 2001 allows the Attorney General to ask the civil court for an order to freeze, take possession of, and forfeit to the Crown, property that is determined to be a proceed or an instrument of unlawful activity.
•Ontario has approximately $24.5 million in frozen property, pending completion of civil forfeiture proceedings.

Saturday, 12 October 2013

For years federal law enforcers ignored warnings about R. Allen Stanford's $7 billion fraud, but don't expect government officials to suffer any penalty. Instead, plaintiffs lawyers are seeking to use Stanford's crimes as a pretext to launch class-action lawsuits against other people and businesses.

Now the Supreme Court will decide whether to let them. The question at oral argument this week in Chadbourne & Parke LLP v. Troice was whether state class-action lawsuits filed against various vendors to Stanford's operation should be allowed to proceed.

Last year Stanford was convicted and sentenced to 110 years in prison for defrauding thousands of investors around the world. Because the enforcement division of the Securities and Exchange Commission spent more than a decade ignoring recommendations to investigate from both inside and outside the SEC, victims will likely recover very little of the billions they sent to Stanford.

So plaintiffs lawyers want to take it out on others who did business with Stanford, even if they didn't have anything to do with his bogus offering of certificates of deposit from his bank in Antigua. Stanford told investors that the money backing their CDs was invested in safe, liquid securities that trade in U.S. public markets, when in fact investors were funding a Ponzi scheme.

The trial lawyers want to sue under state law because previous Supreme Court decisions—especially Central Bank of Denver v. First Interstate Bank of Denver and Stoneridge v. Scientific Atlanta—make it difficult under federal law to sue companies that merely did business with fraudsters, unless these vendors directly participated in misleading investors.

Moreover, a 1998 reform prevents securities class-action cases from being brought under state law. The Securities Litigation Uniform Standards Act says that such cases must be filed under federal law if "the defendant used or employed any manipulative or deceptive device or contrivance in connection with the purchase or sale of a covered security."

Covered securities include stocks and bonds issued by firms that trade on U.S. exchanges. At Monday's oral argument, Justice Antonin Scalia noted that Stanford didn't fulfill his promise to put investors' money in these securities, and therefore such a case "can't be in connection with a purchase or sale that has never occurred."

As usual, Justice Scalia is doing a public service by focusing on the text of the law the court is asked to interpret. But a fraudulent claim of buying securities sure sounds to us like a "deceptive device" that's "in connection with" a purchase of securities. Otherwise, could Bernie Madoff argue that he didn't commit securities fraud because he pocketed the cash from victims instead of investing it?

The Justices also wrestled with the significance of Stanford's various deceptions. The U.S. Court of Appeals for the Fifth Circuit had overturned a district court and ruled in favor of the plaintiffs in part because Stanford made other significant misrepresentations unrelated to securities.

But on Monday Paul Clement, attorney for the defendants, rightly noted that without the promise of these liquid assets, "nobody's going to give their money to a bank in Antigua. The reason you give your money to a bank in Antigua is because you think it's backed by something more than a piece of paper, and the something more was purchases of covered securities on the market."

Even if the Supreme Court rules against them, Stanford's victims can still pursue justice via federal class-action suits, or via individual suits in both state and federal court. But overriding federal law to allow suits against defendants who may have done nothing wrong is anything but just.

Thursday, 10 October 2013

Notice is hereby given that the Joint Liquidators intend to declare a first dividend to unsecured creditors within a period of 4 months from the last date of proving. Creditors who have not proved their debts must do so by 31 October 2013 otherwise they will be excluded from the dividend. The required proof of debt form, which must be lodged at the address below, is available online at http://www.sibliquidation.com/claims-administration.

When 18,000 people got fleeced in R. Allen Stanford’s $7.2 billion Ponzi scheme, the court appointed a receiver in 2009 to recover as much money as possible from Stanford’s failed companies to return to investors.

After 41/2 years, the receiver, Ralph Janvey, began mailing checks ranging from $2.81 to $110,000 to hundreds of investors. That amounts to about $55 million of the $6 billion lost in the scheme, less than a penny on the dollar.

Unlike the investors, Janvey, who has billed from $340 to $400 an hour for his services, is making out quite well. To date, Janvey and his team have recovered $234.9 million from the bankrupt Stanford Financial Group and spent more than half the total — about $124 million — on personnel and other expenses.

“From the victims’ point of view, there is no way, shape or form that the receivership could be viewed as successful, this has been one of the biggest failures of a liquidation in history".

”
The largest chunk of the Janvey team’s expenses — $67.1 million — was spent on “receivership’s professional fees and expenses,” according to court documents. Those fees and expenses add up to more than 28.5 percent of the money recovered from Stanford’s assets so far.

Janvey has “complete and exclusive control, possession, and custody” of the assets left behind by Stanford’s business, according to the court order that named him receiver on Feb. 17, 2009.

Janvey’s attorney, Kevin Sadler of Houston law firm Baker Botts, said the high costs are an unfortunate downside of unwinding R. Allen Stanford’s 18-year financial house of cards, which had offices in 23 states and 13 countries and more than 3,000 employees.

Worldwide tug of war

Sadler said Janvey has been fighting a “worldwide tug of war over what was left of Stanford’s assets,” involving multiple national governments and liquidators in Antigua, where Stanford International Bank was located. In March, Janvey reached a settlement to recover about $300 million of Stanford’s assets that have been frozen in Switzerland, Canada and the United Kingdom.

Sadler said such lawsuits are now the best hope for getting more money back for Stanford’s victims.

Janvey has been enmeshed in controversy regarding the Stanford liquidation. The Securities and Exchange Commission, which nominated Janvey and rarely has public disputes with receivers, won a motion to rein in some of his spending in June 2009 after the first fee applications were submitted.

The expenses included a $160,000 payment to a public relations firm called Pierpont Communications for three months of reviewing, sorting and forwarding emails in 2009. In a written objection to the fee application, court-appointed examiner John Little said he had “significant doubt that Pierpont has created any benefit for the receivership estate.”

$9,439 a day

FTI Consulting, a forensic accounting firm, billed more than $528,000 in airfare, parking, hotels, taxis and subway costs to the estate for its first 56 days on the job. Little objected, pointing out that this amounted to “$9,439 in travel-related expenses per day, every day, during the first 56 days.”

A large part of the receivership’s early spending — $48 million — went to winding down the more than 100 companies in the Stanford Group, costs that were unavoidable, Sadler says.

Today, Little says, Janvey’s spending has slowed. In the 12 months ending June 30, he’s spent $9.1 million, compared with $20 million spent in the first two months of the receivership in 2009.

U.S. District Judge David C. Godbey denied a 2011 request by unhappy investors to intervene in the case because they believed Janvey was spending too much. Godbey noted that “the rate of expenditures on professional fees has decreased markedly over time, with the bulk of such expenses incurred relatively early in the receivership.”

When large Ponzi schemes or companies go bankrupt, court-appointed receivers often find themselves employed for long stretches with a guaranteed income. There are no clear rules or guidelines dictating how a receiver should go about unwinding a failed or fraudulent business or recovering its assets, Sadler said.

That allows receivers like Janvey to work full time for years on an estate, billing either investors or the congressionally chartered Securities Investor Protection Corp., or SIPC.

R. Allen Stanford’s $7 billion scam was just one of many Ponzi schemes to fall apart within the past five years. Most notably, Bernard Madoff was sentenced to 150 years in prison for operating a $50 billion Ponzi scheme that cost investors more than $17 billion.

Irving Picard, the Madoff receiver who was appointed in December 2008, says he has spent about $850 million trying to recover money for investors. The number is huge, but it’s less than 10 percent of the $9.5 billion he has returned to Madoff’s victims. He’s distributed $4.9 billion.

He declined to say whether he believes Janvey’s costs are too high.

“I don’t know enough about the specifics about what he had to do,” Picard said.

Sadler said Madoff’s scheme was a “compact operation to wind down” compared with Stanford’s, which involved more than 100 interconnected companies.

Like Picard, he said, Janvey watches his costs.

“We’ve been pretty sensitive to the fact that we can’t spend $10 to recover $10 — or even $5,” he said.

Janvey has sued about 1,800 former Stanford employees and customers who he says got money from the company, either in salary, bonuses or investment returns, that rightfully belongs to the defrauded investors.

“Everyone we have sued, we have sued because in both fact and law we believe they received money they were not entitled to,” Sadler said.

He said the total amount that Janvey could recover from these lawsuits is $1 billion, the only remaining source of money for the defrauded investors. Most of the former employees and clients are fighting the suits because they believe they only got money they were entitled to.

Political parties sued

Janvey has sued thousands of people, but he has forgone many lawsuits because the return wasn’t worth it. For example, Janvey sued the Democratic and Republican national party committees to recover Stanford’s contributions. He also sent letters to the more than 50 senators and House members who received Stanford contributions but did not go to court.

Fewer than 20 returned the money, he said.

Janvey has been widely criticized for spending too much, but Sadler insists it’s the only way to resolve a major fraud.

“When these things collapse, they just cost a lot of money to clean up,” he said.

The Center for Public Integrity is a nonprofit, independent investigative news outlet. For more of its stories on this topic, go to publicintegrity.org.

$7.2 billion - Amount bilked from investors by R. Allen Stanford’s Ponzi scheme$234.9 million - Amount recovered from the bankrupt Stanford Financial Group $124 million - Amount spent by the receiver on personnel and other expenses $55 million - Amount returned to investors so far

The court will hear oral arguments on the first day of its 2013-14 term to decide whether Mr. Stanford's victims should be allowed to sue third parties such as law firms and insurance brokers on allegations that they aided Mr. Stanford's scheme.

Advocates for the defendants warn that allowing such lawsuits could compromise congressional efforts to curb unwarranted litigation that affects securities markets.

Supporters of Mr. Stanford's victims say Congress never intended to shield wrongdoers in cases where people were tricked into investing in bogus private offerings.

The case is among more than two dozen on the court's docket that could have implications for businesses.
"These aren't the sexiest cases but they're incredibly important," says Thomas C. Goldstein of Goldstein & Russell PC, a veteran attorney before the high court who will argue for victims of the Stanford Ponzi scheme.
Mr. Stanford, once known for his jets, yachts and passion for cricket, was convicted last year and sentenced to 110 years in prison. U.S. authorities said the financier bilked investors by selling them certificates of deposit that he falsely claimed were backed by safe investments. Instead, he used new sales of CDs to pay other investors while funneling money into risky real-estate assets and his own businesses, prosecutors said.

Investors now are going after law and financial-services firms with ties to Mr. Stanford's operations. Victims allege in class-action lawsuits filed under Louisiana and Texas laws that SEI Investments Co. SEIC -1.14%and insurance brokers, including subsidiaries of Willis Group Holdings misrepresented the CDs as safe investments. The plaintiffs also allege that law firms Proskauer Rose LLP and Chadbourne & Parke LLP knowingly helped Mr. Stanford's Antigua-based bank evade regulatory oversight.

The defendants say that defrauded investors are targeting deep-pocketed third parties with remote connections to the Stanford enterprise because Mr. Stanford and his companies are insolvent.

Pennsylvania-based SEI declines to comment beyond its court papers, which say it merely provided a Stanford affiliate with back-office services. Willis Group says in briefs that it helped Mr. Stanford's bank purchase ordinary insurance policies. A spokeswoman says the company looks forward to the Supreme Court's review.

The law firms say in briefs that they didn't make misrepresentations to investors, calling the suits baseless. Representatives for the law firms didn't respond to requests for comment.

The defendants will be represented Monday by prominent Supreme Court lawyer Paul Clement of Bancroft PLLC, who will argue that the lawsuits are barred under the 1998 federal Securities Litigation Uniform Standards Act, which largely prohibits state-law class-action claims for securities fraud.

Mr. Clement says in briefs that Congress was concerned about abusive litigation and wrote the law broadly to stop "enterprising lawyers" from using state law to evade federal limits imposed by Congress and the Supreme Court.

The defendants received a boost from the Obama administration, which filed a brief, signed by the Securities and Exchange Commission, urging the Supreme Court to rule against the investor suits in Chadbourne & Parke v. Troice.

The Fifth U.S. Circuit Court of Appeals ruled last year that the cases against the third parties could move forward. The appellate court, which is based in New Orleans, held that the fraudulent CDs weren't securities traded on national markets, meaning that the federal restrictions on securities-fraud lawsuits didn't apply in the same way.

"We don't think Congress wanted to snuff out really the only effective remedy for fraud in these state-regulated CDs," says Mr. Goldstein, the plaintiffs' lawyer.

Saturday, 5 October 2013

On October 4, 2013, the Receiver filed his 3rd Schedule of distribution payments with the United States District Court for the Northern District of Texas, Dallas Division. The 3rd Schedule will be followed by others, each of which will be submitted by the Receiver on a rolling basis as additional responses to Certification Notices are received and processed.

Thursday, 3 October 2013

I have had several victims - who for whatever reason missed the registration deadline last September and have asked me what they need to do to get their claim registered now. I have been speaking to Baker Botts and this is the reply he has sent to me:

"Generally, if a claimant failed to file a claim with the US receivership prior to the September 1, 2012 bar date, such claims are forever barred as against the US receivership estate, per order of the Court. If there are extenuating circumstances that constitute good cause, the Receivership will consider the circumstances and make a determination whether to recommend acceptance of the late claims by the Court. Given the notice provided, however, we expect that good cause will be a difficult threshold to meet. If claimants wish to submit requests to accept late claims to the receivership, they can use the contact information below.
Nonetheless, claimants who filed claims with the Joint Liquidators prior to September 1, 2012 but did not file with the U.S. receivership by that date may be allowed to participate in future receivership distributions if the Receiver determines the claimant has a valid claim and the claimant agrees to jurisdiction of the US Court. We will communicate directly with claimants who filed with the Joint Liquidators before the US receivership bar date with the appropriate form(s) to execute for the purpose of ensuring that such claimants agree to the jurisdiction of the U.S. District Court in Texas. Only after we have done so and received the appropriate forms back from the claimants will notices of determination issue to those claimants. Even if such claimants are allowed to participate in future distributions from the receivership, they will not be eligible to participate in the current distribution that has already been approved by the Court.
Regards,"

It would appear that if you missed filing your claim with Janvey (Gilardi), you are now bared from registering - except for special circumstances as above. I do feel sorry for all those who have missed out and I am sorry to have to be the bearer of such bad news. Let's hope you have all registered with Grant Thornton. Sadly I cannot help those of you who missed last Septembers deadline with Janvey.

Wednesday, 2 October 2013

The U.S. Supreme Court prepares to hear whether victims of the Stanford Group should be compensated.
By David Jacobs

Published Sep 30, 2013 at 6:00 pm (Updated Sep 30, 2013)

When the U.S. Supreme Court convenes Oct. 7, justices will hear a case that could decide whether victims of the Stanford Group scandal will finally be compensated, some five years after the Ponzi scheme fell apart.

The case could put the court's conservative justices in a quandary: Do I side with class action attorneys, or with a federal agency that wants to expand its power?

A bit of background: Baton Rouge attorney Phil Preis, arguing on behalf of Stanford Group victims, won at the Fifth Circuit Court of Appeals the right to pursue, in state court, a class action suit against law firms and financial services companies that he says enabled the scheme. That was a big win for the victims, because state law allows for a negligence claim, while federal law requires investors to prove actual knowledge of the fraud, a much higher bar.

Unfortunately for the victims, the high court agreed to review the Fifth Circuit's decision. Tom Goldstein, a prominent Washington, D.C., attorney and publisher of SCOTUSblog, will argue that the Fifth Circuit's decision should stand.

"This is going to establish the law on Ponzi schemes in the United States for years to come," Preis says.

He argues that firms that worked with Stanford without probing what should have been obvious fraud should be held liable. Or as he puts it, "don't ask, don't tell" is not a defense. The big fish is SEI, an international firm that manages or administers some $400 billion in assets.

A U.S. Securities and Exchange Commission administrative law judge recently ruled that three former Stanford executives violated antifraud provisions of federal securities laws. The judge says the executives might not have known about R. Allen Stanford's scheme, but they ignored numerous red flags. While that line of reasoning seems to support Preis' argument, at the Supreme Court, the federal government will be supporting the other side.

It says the law, specifically the Securities Litigation Uniform Standards Act of 1998, precludes class actions based on state law that allege "misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security."

Basically, the government says securities fraud is the SEC's turf. And that's generally true. But in this case, the Supremes will have to decide how broadly the phrase "in connection with" should be interpreted.

The feds don't claim the fraudulent Stanford CDs were "covered securities" that might be traded on Wall Street. This was a classic Ponzi scheme; the purported investments underlying the CDs didn't exist. But the Stanford Group sold the CDs while claiming that they were backed, at least in part, by SLUSA-covered securities.

Therefore, the government's lawyers say, the bogus investments were in fact sold "in connection with" covered securities. And for SLUSA to work, it must be interpreted broadly, and the SEC's views (as the SLUSA watchdog) must be given deference.

"Congress intended the phrase 'in connection with' to sweep widely enough to ensure achievement of 'a high standard of business ethics in the securities industry,'" while reining in excessive class actions, the government argues.

But Preis says the SEC is backing what Goldstein calls a "newfound interpretation of the securities laws" to broaden its enforcement power "at the expense of backing the Stanford victims." Since the Stanford products that local investors bought were not sold on the New York Stock Exchange, state law should apply, he says.

Regardless, it's an intriguing turn in the SEC's complicated role in the Stanford fiasco. Many victims blame the regulators for not catching on to Allen Stanford's scheme early. But the SEC backed investors' controversial bid for relief from the Securities Investor Protection Corp., even though the Stanford International Bank in Antigua, which issued the worthless CDs, was never a SIPC member.

The answer to your question concerning payments to trust beneficiaries is addressed on the Frequently Asked Questions page of the Stanford Financial Receivership Claims Website -- under FAQs relating to Trusts, Deceased Accountholders, and Related Beneficiaries -- which states specifically:

1. How will the Receiver handle payments to beneficiaries of trusts, including trusts formerly administered by Stanford Trust Company, Ltd. in Antigua?
Pursuant to the Notices of Determination issued by the Receiver, any payments regarding trusts' accounts will be made to the trusts themselves as payees. However, should the Receiver receive a request to change the payee from a trust to the trust beneficiaries, the Receiver will first need to verify the identities and ownership capacities of all beneficiaries of the trust, which may involve requests for additional information from those individuals, before making the requested change. Please note that any request to change the payee from a trust to its beneficiaries must include the express approval of all such beneficiaries.

Requests to have checks reissued, along with supporting documentation, can be submitted to the Receivership within 180 days of the date the check was issued in writing by email at info@stanfordfinancialclaims.com and by mail at Stanford Financial Claims, c/o Gilardi & Co., LLC, P.O. Box 990, Corte Madera, CA 94976-0990.

As we also state in the FAQs, people should not include requests for changes to payee names on the certification forms they return, and such requests will not be honored. Most claimants who had similar issues properly raised them as part of the notice of determination objection process, as the payee names are stated in the notices of determination. The only other way to make such a request after the check has issued is in writing per the instructions above. Claimants certainly can contact Gilardi by phone but the actual request for the payee name change and check reissuance must be in writing and signed by all beneficiaries of the trust.

I have inquired with Gilardi regarding the answering of phone calls, and they have indicated they are continuing to receive and handle phone calls on a regular basis.

As to claims that were listed for payment on the second distribution schedule, the checks were actually mailed on September 26, 2013. Thus, it is likely that many, have not yet arrived at their destinations.
Regards,

Janvey has posted 2 lists of victims claim numbers that he is starting to make payments to.

Is there anyone on this forum that has seen their claim numbers on either of the lists posted and actually received a cheque from Janvey (Gilardi) yet?

If anyone has received a payment, can you please share with us:

Which list your claim number was posted in

How long the cheque took to arrive

Which country you live in

What method of postage was used to deliver the cheque to you

I am sure there are many awaiting their payments that would appreciate getting this information to give them some idea of how long it will take from your claim number being posted to actually getting a payment in your hand.

Tuesday, 1 October 2013

The Ontario Superior Court of Justice and the Quebec Superior Court have both approved a settlement agreement by and among the Receiver, the Interim Receiver appointed for Stanford International Bank in Quebec, the Ontario attorney general, and others.

The settlement agreement addresses the disposition of Stanford assets in Canada that had been frozen by the Ontario attorney general. The approval of both the Quebec and Ontario courts was required because both courts had asserted jurisdiction over the Stanford assets in Canada. Pursuant to the Canadian settlement, approximately $18 million will be turned over to the United States Department of Justice by the Ontario attorney general. Pursuant to the separate Settlement Agreement and Cross-Border Protocol, entered into by and among the Receiver, the United States Department of Justice, and others, the United States Department of Justice will then turn the funds over to the Receiver for distribution to the victims of the Stanford fraud. Additional amounts may be returned to the United States for distribution by the Receiver following further proceedings in Ontario. Please click here to view copies of the Canadian orders.